JUDGMENT
G. Sivarajan, J.
1.In matter arises under the Kerala General Sales Tax Act, 1963 (for short “the Act”). The same assessee is the revision petitioner in all these three cases. The State is the respondent in all these cases. The assessment year concerned in T.R.C. No. 294 of 2001 is 1985-86, in T.R.C. No. 296 of 2001 is 1987-88 and in T.R.C. No. 297 of 2001 is 1986-87.
2. The petitioner is running a bar attached hotel in the name “Alleppey Prince Hotel” at Alappuzha, The petitioner filed returns under the Act for the aforesaid three years, claiming exemption in respect of the entire turnover, representing cooked food and second sale of foreign liquor, except for the year 1987-88, during which period foreign liquor was taxable at two points. The assessing authority did not accept the books of accounts and the returns for the said three years on account of certain discrepancies and irregularities found on the basis of materials gathered in the inspection. The books of accounts for the three years were accordingly rejected and the turnover was estimated. The assessing authority, for the assessment year 1985-86, has estimated the turnover exigible to tax Under Section 5-A of the Act at 60 per cent of the purchase value of rice, provision, edible oil, dressed chicken, etc., and also estimated the sales of bewerages, purchases of prawns, groundnuts, etc., and sales of empty bottles and empty containers. An addition of Rs. 25,000 was also made towards omissions and suppressions found on inspection conducted on July 12, 1985. Ultimately the assessing authority fixed the taxable turnover for the assessment year 1985-86 at Rs. 3,49,300. Similarly, for the assessment year 1986-87 the assessing authority had estimated the purchases of consumable goods in the restaurant at 2/3rd of the sales and from this 60 per cent was apportioned as taxable Under Section 5-A of the Act, which came to Rs. 3,08,585. He also estimated the sales of bewerages, purchases of prawns and groundnuts and also sales of empty bottles and empty containers, and ultimately, fixed the taxable turnover at Rs. 3,11,370. For the assessment year 1987-88 the assessee filed a return disclosing a total and taxable turnover of Rs. 18,58,732.20 and Rs. 7,97,673.95 respectively. The assessing authority proposed to reject the return and accounts alleging various irregularities, including stock variation found on inspection conducted on September 17, 1987, in various items of foreign liquor. After considering the objections filed by the petitioner, the assessing authority, by adopting the same pattern as adopted for the assessment years 1985-86 and 1986-87, had fixed 2/3rd of the sales turnover of cooked foods as purchases of consumable goods and 60 per cent thereof was apportioned as taxable Under Section 5-A of the Act, which came to Rs. 4,58,865. The assessing authority had also estimated the sales of bewerages, empty bottles and empty containers and also purchases of prawns, etc. A further addition of Rs. 1,75,000 was also made towards omissions and suppressions based on the inspection conducted on September 17, 1987 in respect of foreign liquor. The taxable turnover was thus fixed at Rs. 20,01,600. Being aggrieved by the said three assessment orders, the petitioner filed appeals before the Appellate Assistant Commissioner, Agricultural Income-tax and Sales Tax, Alappuzha. These appeals were disposed of by separate orders dated November 30, 1990. The first appellate authority, it is seen, has practically accepted the purchase turnover furnished by the petitioner in respect of consumable goods used for the preparation of cooked foods. However, the first appellate authority has estimated the taxable turnover at 50 per cent of the purchases of consumables so determined. The first appellate authority has also reduced the addition towards probable omissions and suppressions made for the year 1985-86 from Rs. 25,000 to Rs. 10,000. For the assessment year 1986-87, the first appellate authority adopted 2/3rd of the sales turnover of cooked food as purchase turnover of consumable items and also adopted 50 per cent of the purchase turnover as taxable Under Section 5-A of the Act. So far as the assessment year 1987-88 is concerned, the first appellate authority, in addition to the fixation of taxable turnover of cooked foods Under Section 5-A of the Act at 50 per cent of the purchases estimated, had also reduced the addition on account of stock variation of items of foreign liquor found on verification of the books with reference to the Shop Inspection Report prepared on September 17, 1987 from Rs. 1,75,000 to Rs. 1,00,000. Not being satisfied with the first appellate authority’s orders, the petitioner filed appeals for the three years before the Tribunal. The Tribunal, by a common order dated December 14, 2000, annexure C, disposed of all the three appeals. The appeals filed for the assessment years 1985-86 and 1986-87 were dismissed, confirming the order of the first appellate authority. For the assessment year 1987-88, the Tribunal confirmed the order of the first appellate authority so far as the fixation of taxable turnover Under Section 5-A of the Act is concerned. The Tribunal, however, reduced the addition of Rs. 1,00,000 sustained by the first appellate authority to Rs. 50,000 in respect of foreign liquor.
3. Shri P. Balachandran, learned Counsel appearing for the petitioner, submits that when the assessing authority and the first appellate authority had accepted the sales turnover of cooked foods and also the purchases effected evidenced by the books, there was no justification on the part of the said authorities to make an estimate of the taxable turnover Under Section 5-A of the Act. Counsel also submitted that the taxable turnover so estimated is arbitrary and excessive. Counsel further submitted that the addition of Rs. 50,000 sustained by the Tribunal in relation to the stock variation in foreign liquor found on the basis of the inspection conducted on September 17, 1987 is also excessive having regard to the nature of the irregularities found.
4. We also heard the learned Government Pleader for the respondent. He submits that so far as the assessment years 1985-86 and 1986-87 are concerned, the first appellate authority had granted reasonable relief in respect of the purchase turnover exigible to tax Under Section 5-A of the Act and that for the assessment year 1987-88, in addition to the relief granted by the first appellate authority Under Section 5-A and also in regard to the addition towards stock variation in foreign liquor, the Tribunal also granted substantial relief, and therefore, no interference is called for by this Court.
5. We have considered the rival submissions and also perused the orders of the three authorities. We find from the first appellate authority’s order that practically the sales turnover of cooked foods and the purchases of consumables used for preparation of cooked foods recorded in the books have been accepted. The assessing authority himself has exempted the purchase turnover of items like provisions purchased locally and supported by bills, and in the absence of evidence regarding the local purchases of other items, the first appellate authority has fixed the taxable turnover Under Section 5-A at 50 per cent of the admitted purchases. In the absence of any material furnished by the petitioner regarding the non-exigibility to tax on the remaining items purchased, certainly, an estimation is called for. According to us, the first appellate authority had rightly fixed 50 per cent of the purchases as taxable, and the assessee is entitled to get exemption in respect of the purchases supported by bills, as allowed by the assessing authority. The Tribunal had found that the first appellate authority has granted reasonable relief for all the three years. In the circumstances of the case, we do not find any reason to interfere with the finding rendered by the two appellate authorities. Similarly, for the assessment year 1987-88 the assessing authority, on the basis of the stock variation in foreign liquor items, both excess and shortage, had made an addition of Rs. 1,75,000. The first appellate authority, having regard to the nature of the variation had reduced the addition to Rs. 1,00,000. The Tribunal had also independently considered the materials and found that having regard to the nature of the stock variation, the addition sustained by the first appellate authority is excessive and had reduced the addition from Rs. 1,00,000 to Rs. 50,000. In spite of our anxious consideration of the matter on the basis of the materials considered by the three authorities, we are unable to hold that any further relief is called for at our hands.
In these circumstances, there is no merit in these three cases. They are accordingly dismissed.
